Assignment Topic and Review: Feasibility report in San Diego Market

Assignment Review on: Business Planning Capstone

Feasibility Analysis Template

The following is the feasibility study for a business plan related to opening up a hair salon in the San Diego CA Area. The salon will cater its services to all age groups and also all demographics and psycho graphics and specially the military style. It has been estimated that the company will be able to make an amount of $ 250000 per year. The analysis is for the purpose of analyzed whether or the not the business is feasible or not. The following feasibility study will provide an idea as whether to move further or not. The study includes all the factors under study like the industry analysis, market and customer analysis, products analysis, founding team analysis and the financial analysis of the company business under consideration. This study will help the entrepreneur to analyze whether or not the business will make a profit or not in the coming time period.


Business Idea Business considerations/Fit within Project Guidelines Decision to move forward (yes/no) and rational
1.Organizating Service   No
2.Day Care   No
3.Hair Salon Yes Yes
4.Auto Repair Garage   No
5.Private Investigator   No


Key Areas to be Analyzed Key Questions to be Analyzed Facts We Know Facts We Need to Know
  • What are the dollar size, growth trends, and life-cycle stage of the industry?










  • Are there any barriers to entry? If so, what are they?






  • What is the status of technology and R&D expenditures?



  • What are typical profit margins in the industry?







  • What are distributors, manufacturers, and suppliers saying about the industry?





  • Who are the major players in the industry?
There is a high growth trend in the hair salon industry is San Diego CA Area. As high trends has been there with respect to different hair styles kept by people of the city. High market potential resist in this market having large competition and potential for new entrants due to the non fulfillment of the overall customers demand. The industry is in the growth stage of the life cycle of the business.



No there is no barrier to entry, as the business requires less capital investment and no player is that large to affect the market (Allen, 2008).




The technology and R&D expenditures are low.




The typical margin in the industry is somewhat reasonable.







As per the distributers, manufacturers and suppliers the industry has a large potential to grow, as in today’s era even men’s are also visiting the salons and keeping different hair styles (Stokes & Wilson 2010).



There are several players in the industry, as different areas have different major players.

The facts related to the dollar size of the industry needs to be analyzed as the industry is not appropriately organized and needs a proper evaluation by the authorities concerned (Allen, 2008).








The factor that may affect the entry in the market place needs to be known. And also the factor that affects the organization after one year of entry also needs to be analyzed and known (Philips 2007).



The requirement of the technology and equipments used by the competitors in the industry for providing proper services needs to be analyzed (Stokes & Wilson 2010).


As the industry is not properly organized the accurate profit margin charged in the industry needs to be evaluated as different players charge different prices and charge different profit margin (Allen, 2008).


The opinion of the manufacturers, distributors and suppliers needed to be known with respect to expected growth rate they expect in the industry (Stokes & Wilson 2010).


The major player in the industry who leads the city needs to be analyzed as due to the unorganized market this is difficult to evaluate. But players are known by their name in terms of the services they provide to the customers (Philips 2007).




  • What potential markets are available to the business?





  • What are the demographics and psychographics of the target market?







  • What is the profile of the first customer? What is the “pain” that is being cured with the business’s product or service?



  • What is the customer demand for the product or service? How will you triangulate that demand figure to arrive at the best estimate of demand?
The business has a large potential and market available to cater. The business can cater the men, women, boys and girls of all ages and can provide different hair styles and cuts.


The demographic of the industry includes all the males, females of all the age groups and people with different life style like gays, lesbians, etc. are the major customers for the market and also the wealthiest people in the area also the major target for the industry (Philips 2007).


The profile of the first customer is still unknown. This can only be analyzed by the opening of the business. The pain that can be cured will depend on the customer visiting for the first time at the salon (Allen, 2008).


Different customer demographic demands for different range of services, this needs to be triangulated by the analysis of the customers for a fixed period of time.

The potential with respect to each style of hair cut and the air cut which are in demand for each demographics needs to be known.



The facts related to the expenditure made by each group known needs to be analyzed in order to analyze the main targeted demographics for the business. Also the psychographics needs to be analyzed for each targeted group (Allen, 2008).



The profile of the first customer is fact which we needs to know and also the pain that will be relieved will also depend o the demographic of the customer visiting the place.


These facts need to be known and this can only be known by entering the market place and serving the customers to the fullest. The demand figure for demand from each customer base can only be evaluated after making a good customer base in the market.


Product or Service
  • What are the features and benefits of the product or service?









  • What product development tasks must be undertaken, and what is the timeline for completion?





  • Which intellectual property rights can be acquired?






  • How are these products or services differentiated from others in the market?







  • Who are your competitors, and how are you differentiated from them?









  • What are your competitors’ core competencies? Do they have the ability to move into your competitive space?


  • Which distribution channel alternatives are available to your business, and which customers will they serve?
The features include customized hair dressing and cutting. The services also include the computerized hair style matching the customer requirement. Hair coloring and making different hair styles that will suit the customer the most. Styling of hair in different pattern and also providing different looks as per the customers’ demands.



The product development task to be undertaken will be related to the services to different customer demographics which will suit them the most. The time line for this will be approximately one year of service (Stokes & Wilson 2010).



The intellectual property rights related to the research and development of the products for a specific demographic customer base needs to be acquired.




The products developed will be differentiated from that of the other products available in the market in terms of quality and results. These are specific products related to each kind of issue related to hair like, hair fall control lotion, hair conditioner, and natural hair color and so on (Philips 2007).


The competitors are the other salon s who are catering the services from long and have a good customer base. We are differentiated from them in terms of the team of experts we have and the extraordinary products development which we provide to our customers and address their issues related to the problems faced by them in their day to day life related to their hair (Stokes & Wilson 2010).


The competitors are well placed in their area of expertise. They have a strong customer base which needs to be targeted.



The distribution channel is available to the business is the home service to be provided to the elite customers base.


The facts related to the products and services includes the analysis of the customer’s demands and also the analysis of demand of services and features demanded by different demographic of customers (Philips 2007).





The fact which needs to be known related to this area is the activity and demographic service which needs to be conducted and which customer base needs to be targeted to provide the service and development of the product (Scott1994).


The type of intellectual property rights related to the product developed needs to be known. This is because other competitors may also copy the product developed (Stokes & Wilson 2010).



The facts which need to be know related to the product and service differentiation is that each product has some extraordinary quality which makes it unique; this uniqueness needs to be evaluated in other products offered by competitors in the market (Soundarapandian 2002).



The facts which need to be known in this respect are that the products are the competitors are providing and what are their specialties and why customers prefer them in the current time period.







The competitor’s competencies are their strong customer base, but whether they can enter our competitive space or not this needs to be analyzed (Philips 2007).

The elite customer’s base needs to be known and what services they hire for this purpose and distribution channel of home service is also required to be known (Soundarapandian 2002).



Founding Team
  • What experience and expertise does the founding team bring to the business?








  • What gaps do you have in experience or expertise?







  • How will you fill those gaps?







The founding team is highly experienced and has a high expertise in different hair styling and the main area is the military styling. The founding team has a great experience in designing different hair styles and has relevant experience in this field and has done styling to different fashion shows (Scott1994).



The gaps are related to the change in the taste of different demographic customers and the change in the taste and fashion due to change in time.





These gaps can be filled by application of the experience and knowledge of the experts. As the trends of fashion and taste changes frequently in this industry and this can be filled by regular training of the experts.

The expertise and experience which founding team has bring in the business are how much relevant to the business needs to be evaluated.







The gaps related to the knowledge of expertise due to the change in the fashion and taste needs to be analyzed. The change in the taste and fashion has to be evaluated in order to examine the degree of difference in the taste changes and expertise.


The training and the different methods that needs to be provided to the experts with the change in taste and fashion also needs to be known and analyzed (Soundarapandian 2002).

  • What are your start-up capital requirements?









  • What are your working capital requirements?






  • What are your fixed-cost requirements?




  • How long will it take to achieve a positive cash flow?






  • What is the break-even point for the business?







  • What are the detailed assumptions or explanations for the numbers you are projecting?






  • What are the major milestones in the business for the next two years, and how will those milestones trigger changes in your business?




  • What is the timeline for completion of all the tasks to start the business?
The startup capital requirement will vary depending on the level of operations and the investment in the infrastructure. The start capital will vary from around $500000-$100000.






The working capital requirement will also vary on the level of operations. The normal expected working capital requirement will also vary from $100000-$200000 (Scott1994).



The fixed cost requirement will include the cost of experts and their salary, the fixed rent of the rented store.



An expected period of more than a year will be required to achieve the position of positive cash flows.





The breakeven point for the business will be the point when the company total costs equal the total revenue. The breakeven point will be in the range of $100000-$200000, because the company initial investment and cost is equal to this amount.


The assumptions and the explanation for the numbers projected above is based on the expectation of the overall revenue generation of around 250000 per annum, and achieving this level of revenue per annum requires this much level of investment and expenses projected above.



The major milestones in the business in the next two years will include the achievement of the expected revenue stream within a year and achieving this will boost the business objective and target the other level of revenue stream (Soundarapandian 2002).



The time line for the completion of all the tasks for starting the business is approx three months (Kugbei, Turner and  Witthaut, 2012).

This needs to be evaluated by the analysis of the level of operations and the infrastructure requirement and the location for opening up the salon. This will also depend on the number of staff and the level of amenities and the degree of customers to be served like the rich class, medium class and so on (Scott1994).


The working capital will depend on the number of customers visiting the salon in the year. The number of customers expected to be visiting the salon needs to be evaluated (Kugbei, Turner and  Witthaut, 2012).


The other fixed expenses like the cost of fixed equipments other expenses related to business operations needs to be evaluated.


The exact period cannot be evaluated for achieving the position of positive cash flows as this requires the exact valuation of operations of the business of the salon (Kugbei, Turner and  Witthaut, 2012).


The exact breakeven point cannot be calculated with accuracy but it will be equal to the initial cost incurrent for the purpose of initiating the business model (Soundarapandian 2002).




The assumption detailed for the numbers requires proper evaluation of the business and this can only be accepted after the application of the business. The exact figures can be matched by analyzing the current running business of the similar nature and level.


These milestones are expected to be achieved in the first year if this is not achieved then the forces behind this delay needs to be evaluated and addressed (Kugbei, Turner and  Witthaut, 2012).




The exact timeline cannot be estimated but it can be expected by analyzing the tasks and activities to be started for initiating the business.





Allen, K. (2008). Growing and managing a small business, an entrepreneurial perspective (2nd ed.). Boston: Houghton Mifflin.

Kugbei, S., Turner, M. and  Witthaut, P. n.d. (2012).  Finance and Management of Small-Scale Seed Enterprises. ICARDA.

Philips, J.P. (2007). How to Start Your Own Small Business: And Make It Succeed. AuthorHouse.

Scott, C. (1994). Organization Vision, Value & Mission. Crisp Publications, Inc.

Soundarapandian, M.(2002). Small Scale Industries: Management of small scale industries.  Concept Publishing Company.

Stokes, D. & Wilson, N. (2010). Small Business Management and Entrepreneurship. 6th ed. Cengage Learning EMEA.


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